JBS S.A.03-20 00:48 GMT (Report with Analyst's Data Sheet) After six months spent in a Brazilian jail, the second top executive at the helm of JBS S.A. (JBSSBZ) is said to be nearing a outcome similar to that of his...

In an interesting wrinkle in GD's pending acquisition of CSRA, tiny defense contractor CACI has made a hostile offer for CSRA, comprising cash and stock valued at the time of the bid at $44/share, or 8% higher than GD's all cash agreement (only 3% higher at the moment, as CACI stock has plunged). CSRA has said it will review and consider the offer. GD's position is that while the CACI bid is nominally higher than its own, its value is subject to the market price of CACI's stock and thus less certain. Also GD is ready to close in early April, while CACI would likely close months later. Interestingly, GD also cites the competitive disadvantage of the pro forma heightened leverage at CACI (already a junk credit), which GD says would increase to 5.7x. Thus GD is not sweetening its bid at the moment, and it may not be necessary to do so in order to prevail given the volatility in CACI's stock price. Recall we already thought GD was paying a hefty price for CSRA (a 32% market premium, with CACI's nominal premium a whopping 44% to the unaffected share price), and we would certainly hate to see it pay more, especially if it were paying more in cash. We don't anticipate material additional credit damage to GD from this last minute takeover battle.

Newell Brands 03-19 14:40 GMT(Comment)It is with some relief that we saw the word "deleverage" prominently featured in the headline of...

It is with some relief that we saw the word "deleverage" prominently featured in the headline of Newell's press release this morning announcing it had reached an agreement with activist shareholder Carl Icahn, who disclosed on Friday a 6.9% stake in the company as well as activist intent. It has been our position with regard to activists Starboard Value that it should be clear to any investor that the company needs to reduce its debt load, regardless of what other governance, operational, structural, or strategic plans they may have for Newell. While Mr. Icahn is not typically the bondholder's friend, in this case he appears to be siding with management on this important point. Newell has agreed to add five directors chosen by Mr. Icahn, expanding the board from nine to eleven members after the annual meeting, and an Icahn representative will become chairman. Mr. Icahn has agreed to vote all his shares with management at the 2018 annual meeting, but we did not see any mention of a standstill agreement, which is typically part of such an arrangement. Newell has also added another adjective to its strategic plan, which is now referred to as the "expanded accelerated transformation plan." The main thrust of this is the increase to $10 billion from $6 billion of aftertax divesture proceeds, although no additional businesses on the block were specified. Presumably, these additional funds will enable faster debt reduction (under the previous plan 2/3 of the proceeds were earmarked for debt reduction) as well as higher returns of cash to shareholders, although again no details were forthcoming. Frankly the agreement and the expanded accelerated transformation plan appear to have been thrown together in a hurry, probably over the weekend since Mr. Icahn filed his 13-D report. Thus far the stock market reaction to this news has not been favorable, however, which may give more fuel to Starboard.

Nutrien03-19 03:16 GMT (Report with Analyst's Data Sheet) The January 1 merger of PotashCorp and Agrium has formed Nutrien. If last week's exchange and solicitation offer is approved, all outstanding bonds will be exchanged...

It must be proxy season, because the activist and company rhetoric is really heating up. After yet another sudden board resignation last week (for "personal" reasons), the fifth director resignation since January, Newell's independent directors made public a sharply worded letter to shareholders this morning. The letter unveils a conspiracy theory regarding former board member Martin Franklin, the former CEO and Chairman of the acquired Jarden. The letter confirms press reports that the previous board resignations were in reaction to a failed attempt to elect Mr. Franklin as Newell's Chairman, implying that he was already in cahoots with activist shareholders Starboard Value, which is trying to replace the board and management team, before he resigned from the board. The letter casts aspersions on Jarden's governance, notes that Starboard has yet to outline its value creation plan, and reveals that Starboard never attempted to meet with management or the board before launching its proxy battle. Newell's criticism of Starboard's nominees for not owning stock was countered later by a commitment by Starboard that three of its nominees would buy $25 million of stock if the board were replaced. It reiterates Newell's accelerated transformation plan to address its underperformance, which was introduced in January, with the asset sale process already underway. In Newell's favor, the plan centers around pruning and simplifying the company's unwieldy portfolio of brands, saving costs to fund growth, and accelerate deleveraging. Perhaps Starboard has a plan that would be even more favorable to the credit profile, but we doubt it. Our theory that a settlement would be reached before the annual meeting is looking a bit more far-fetched as the sides stake out seemingly irreconcilable positions and former board members take sides with the activists.

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Feb 8, 2018 | Financial Times

KS on Wells Fargo - Q- "It is certainly a black eye for Wells Fargo that they have not been able to put the sales incentive scandal behind them, but the growth restrictions are a greater concern for equity investors than for bondholders."

Nov 6, 2017 | Bloomberg

CL on TEVA -Q-"We find it troubling that management, which presumably met with Fitch before the downgrade, was not able to convince the rating agency that it would take more dramatic deleveraging actions in order to preserve investment grade ratings,"

Nov 6, 2017 | Bloomberg

DN on Sprint- Q- "They don't produce enough free cash flow to cut into the debt," "The only possible way to do that is to continue cutting costs."

Oct 14, 2017 | Associated Press

PA on Pacific Gas and Electric Co.- Q- Investors "are spooked,"

Oct 12, 2017 | Reuters

KN on Toys R Us -Q- "We rated the bonds Underperform when they were trading at 95," "We are especially good at warning bondholders about deteriorating situations,"